In case you missed it, this piece from Citrini Research made the rounds earlier this week. Written as a macro memo from the future, it looks back on the past two-plus years and the sweeping impact AI has had on society. Though framed as “not doomerism fan fiction,” it reads very much like the backdrop of a dystopian novel or film, one we’d gladly read or watch.
We encourage readers to go through it and draw their own conclusions, but the core argument is that the AI boom has profoundly reshaped the economy, society, and business, ultimately leading to a collapse in aggregate demand. The timing is inconvenient for markets: anxiety around AI’s effects is high, regulation remains (intentionally) absent, and equities are hovering near all-time highs. Adding fuel to the fire, after the close on Thursday, Block (formerly Square) announced it would reduce its headcount by 40% after installing AI tools.
AI Threatens Knowledge Work
Strip the fear of AI down to its core, and it’s this: it threatens knowledge work, the very engine of human activity and wealth creation since the Industrial Revolution. The promise to society has been: work hard, earn good grades, get a strong education, and you’ll secure economic stability. That has already begun to break for many following the formula, however, something we’ve highlighted before, most recently in Speculation and the War for Attention.
But what if it’s not just fraying? What if it breaks entirely? That’s the anxiety AI provokes, and the scenario Citrini lays out. Employment, wages, ability to service debt and prop up asset prices collapse. What ensues is a cataclysm in aggregate demand — deflation on a scale society has never seen.
There are Historical Precedents
Here’s the thing about this type of technology: we’ve been here before. The steam engine replaced human and animal labor with mechanical power, centralizing production and driving industrial scale. Electrification, a true general-purpose technology, went further. It didn’t just power factories, it reorganized the economy. Productivity initially lagged, but once workflows, capital stock, and institutions adapted, output surged. Labor unrest followed mechanization; electrification brought corporate and labor reform. Yet demand did not collapse. Higher productivity translated into higher output and higher GDP. Tasks changed. Jobs evolved.
AI is more analogous to electrification than steam. It is not simply a tool layered onto existing processes; it requires workflow redesign, new skills, and complementary investment. Technology historically displaces tasks, not total labor demand. The transition may be volatile and uneven, but history suggests that general-purpose technologies expand productive capacity rather than extinguish it.
The AI Implications for Bitcoin
If AI is a general-purpose technology akin to electrification, its relevance to bitcoin is not technological but macroeconomic. Such technologies reshape employment, economic growth, real rates, global liquidity, and risk appetite. Bitcoin is downstream of those forces, and ultimately, the determining variable is how AI and the policy response change those factors.
If AI-driven growth occurs alongside expanding liquidity and contained real rates, that backdrop can be supportive for bitcoin. But if stronger growth lifts real yields, tightens policy, and reduces the need for monetary accommodation, bitcoin may face headwinds. Conversely, if AI generates labor disruption or volatility that prompts fiscal expansion and easier monetary policy, the resulting liquidity impulse would likely favor bitcoin.
Final Thoughts
One final note. The arc of human civilization is defined by adaptation. Time and again, through industrial revolutions, world wars, financial crises, pandemics, and technological upheavals, societies have confronted disruptions that appeared existential in the moment. Yet the prevailing pattern is triumph, not collapse. Institutions reform. Businesses reorganize. Labor markets re-skill. Incentives realign. The human instinct is to compete, adapt, and overcome, not to concede obsolescence.
AI will pose challenges, but they are unlikely to break from that historical pattern. Like steam power and electrification before it, AI changes relative advantage. Firms that integrate it effectively will widen margins and productivity gaps. Workers who adapt will enhance their relevance. Those who resist may fall behind. The transition may be uneven and volatile, but technological shifts have consistently rewarded adoption over avoidance.
The implication is not that disruption will be painless, but that the equilibrium response to new technology has historically been integration, not obsolescence. Society's response to AI will likely follow the same pattern.
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